WM to acquire Stericycle in $7.2bn medical waste deal

BY Fraser Tennant

In a transaction that expands its environmental solutions in a growing healthcare market, WM is to acquire fellow medical waste management company Stericycle for approximately $7.2bn.

Under the terms of the definitive agreement, WM will acquire all outstanding shares of Stericycle for $62 per share in cash, representing a premium of 24 percent to Stericycle’s 60-day volume weighted average price as of 23 May 2024.

The acquisition advances WM’s growth strategy, underscores the importance of executing its sustainability initiatives and aligns with its financial goals, including growth in operating earnings before interest, taxes, depreciation and amortisation and cash flow.

Previously known as Waste Management and based in Houston, Texas, WM is driven by commitments to put people first and achieve success with integrity. Through its subsidiaries, WM provides collection, recycling and disposal services to millions of residential, commercial, industrial and municipal customers throughout the US and Canada.

“We have a proven track record of integrating and optimising acquired businesses that benefit our customers and employees and deliver a strong return on investment for our shareholders,” said Jim Fish, president and chief executive of WM. “We look forward to working with the Stericycle team to capture the strategic, customer service, environmental and financial benefits of this acquisition.”

A US-based business to business services company and a leading provider of compliance-based solutions that protect people and brands, promote health and wellbeing and safeguard the environment, Stericycle provides customers in North America and Europe with solutions for regulated waste and compliance services and secure information destruction.

“Our sustained focus and commitment to transforming our business over the past five years has uniquely positioned Stericycle for this transaction,” said Cindy J. Miller, president and chief executive of Stericycle. “This deal creates significant value for shareholders, unlocks new opportunities to deliver diversified services to customers, and supports investment in the growth and development of our team members.”

The transaction has been unanimously approved by the boards of directors of both companies.

Expected to close as early as the fourth quarter of 2024, the transaction is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by a majority of the holders of Stericycle’s outstanding common shares.

Mr Fish concluded: “The acquisition of Stericycle broadens the scope of our service offerings and brings together the leader in solid waste and a premier company in regulated medical waste services.”

News: Waste Management adds medical-waste portfolio with $7.2 bln Stericycle deal

WeWork wins bankruptcy plan approval

BY Richard Summerfield

Shared office provider WeWork has won the approval of a US bankruptcy judge for its Chapter 11 bankruptcy plan, enabling the company to eliminate $4bn of debt and handing control over to a group of lenders and real estate tech firm Yardi Systems.

The company, which was founded in 2010 and was once trumpeted as the future of the office, amassed considerable losses during a period of aggressive global expansion prior to the COVID-19 pandemic. However, as demand for office space fell dramatically during the pandemic and in the immediate aftermath, the company was forced to file for bankruptcy protection in November 2023.

The plan, which was approved in a New Jersey bankruptcy court last week, will eliminate $4bn of the firm’s debt and reduce future rent obligations by $12bn, according to the company. WeWork expects to complete the restructuring by mid-June, noting that it was now positioned for “sustainable, profitable growth”, raising the prospect of it breaking even after years of steep losses.

Going forward, WeWork plans to operate 337 shared office spaces globally, around half the number of sites it had around a year ago. The US and Canada will remain its biggest market, with more than 170 locations. Yardi Systems is taking a majority stake in exchange for providing $450m in financing along with other investors. Japan’s SoftBank Group also remains a backer.

“Due to the tireless efforts of our team, and the unwavering loyalty of so many of our members, we have completed our Chapter 11 proceedings with success well beyond our initial expectations,” said David Tolley, chief executive of WeWork. “In one of the largest and most complex restructurings, we have achieved extraordinary outcomes. Over the last year, we have also seen strong demand across the WeWork system and increased our member net promoter scores. Each of these achievements represents an exceptional testament to our people, our brand and our industry-leading service offerings.”

Prior to the plan’s approval, Adam Neumann, co-founder and former-chief executive of WeWork, confirmed he was no longer attempting to acquire the business. Mr Neumann stepped down from WeWork in 2019 after its initial failure to go public, and following criticism of the firm’s internal culture. He had reportedly offered $500m for the company but declined to move forward with his bid, noting that he did not think WeWork’s plan was viable in the long term.

News: US court approves WeWork bankruptcy exit

ConocoPhillips strikes $22.5bn Marathon deal

BY Richard Summerfield

ConocoPhillips has agreed to acquire Marathon Oil in an all-stock transaction with an enterprise value of $22.5bn, including $5.4bn of net debt.

Under the terms of the deal, Marathon shareholders will receive 0.2550 shares of Conoco common stock for each share of Marathon common stock held, representing a 14.7 percent premium to Marathon’s closing share price on 28 May 2024, and a 16 percent premium to the prior 10-day volume-weighted average price.

The deal, which is expected to close in the fourth quarter of 2024, subject to the approval of Marathon’s stockholders, regulatory clearance and other customary closing conditions, is the latest in a spate of recent consolidation deals in the oil & gas industry. 2023 saw transactions worth a total of $250bn struck by companies in the space, and significant dealmaking has continued throughout the first half of 2024.

“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading US unconventional position,” said Ryan Lance, chairman and chief executive of ConocoPhillips. “Importantly, we share similar values and cultures with a focus on operating safely and responsibly to create long-term value for our shareholders. The transaction is immediately accretive to earnings, cash flows and distributions per share, and we see significant synergy potential.”

“Powered by our dedicated employees and contractors, we built a top performing portfolio with a multi-year track record of peer-leading operational execution, strong financial results and compelling return of capital to our shareholders - all while holding true to our core values of safety and environmental excellence,” said Lee Tillman, chairman, president and chief executive of Marathon Oil. “ConocoPhillips is the right home to build on that legacy, offering a truly unique combination of added scale, resilience and long-term durability.”

According to a statement announcing the deal, Conoco expects to achieve at least $500m of run rate cost and capital savings within the first full year following the closing of the transaction. Furthermore, independent of the transaction, Conoco expects to increase its ordinary base dividend by 34 percent to 78 cents per share starting in the fourth quarter of 2024.

Upon closing of the transaction, Conoco expects share buybacks to be over $20bn in the first three years, with over $7bn in the first full year, at recent commodity prices.

News: ConocoPhillips to buy Marathon Oil for $22.5 billion in latest energy merger

Biogen acquires HI-Bio in $1.8bn deal

BY Fraser Tennant

In a deal that bolsters its late-stage pipeline, US multinational biopharmaceutical company Biogen Inc. is to acquire privately-held clinical-stage biotechnology firm Human Immunology Biosciences (HI-Bio) for $1.8bn.

Under the terms of the definitive agreement, Biogen will make an upfront payment to HI-Bio of $1.15bn, with HI-Bio’s stockholders eligible for payments of up to an additional $650m. 

Biogen also plans to leverage its existing global development and commercialisation capabilities in rare diseases and its strong scientific expertise in immunology to support the advancement of felzartamab and the HI-Bio pipeline.

Felzartamab, HI-Bio’s lead asset, is a fully human anti-CD38 monoclonal antibody that has been shown in clinical studies to selectively deplete CD38-plus cells including plasma cells and natural killer, or NK, cells which may allow for additional applications that improve clinical outcomes in a broad range of immune-mediated diseases.

“This late-stage asset has demonstrated its impact on key biomarkers and clinical endpoints in three renal diseases with serious unmet needs,” said Priya Singhal, head of development at Biogen. “It is a strategic addition to the Biogen portfolio as we continue to augment our pipeline and build on our expertise in immunology.”

Founded in 1978, Biogen is a leading biotechnology company that pioneers innovative science to deliver new medicines to transform patients’ lives and to create value for shareholders and our communities.

“With its deep development and commercialisation capabilities, Biogen is in a position to accelerate the development of new medicines, including felzartamab, for patients with severe immune-mediated diseases,” said Travis Murdoch, chief executive of HI-Bio. “We are excited to combine the HI-Bio team’s expertise with Biogen’s global footprint.”

In addition to lead programme felzartamab, the HI-Bio pipeline includes izastobart/HIB210, an anti-C5aR1 antibody currently in a phase 1 trial and with potential for continued development in a range of complement-mediated diseases. HI-Bio also has discovery stage mast cell programmes with potential in a range of immune-mediated diseases.

The transaction is subject to customary closing conditions, including receipt of necessary regulatory approvals, and is currently anticipated to close in the third quarter of 2024.

News: Biogen in up to $1.8 bln deal as rare diseases take center stage

Red Lobster files for Chapter 11

BY Fraser Tennant

With debts of approximately $294m, US-based restaurant chain Red Lobster, along with its direct and indirect operating subsidiaries, has filed for Chapter 11 bankruptcy protection.

The company intends to use the bankruptcy proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.

In addition, the company has been working with vendors to ensure that operations are unaffected and has received a $100m debtor-in-possession financing commitment from its existing lenders.

As part of the Chapter 11 filing, Red Lobster has entered into a stalking horse purchase agreement pursuant to which Red Lobster will sell its business to an entity formed and controlled by its existing term lenders.

“This restructuring is the best path forward for Red Lobster,” said Jonathan Tibus, chief executive of Red Lobster. “It allows us to address several financial and operational challenges and emerge stronger and refocused on our growth.”

The company has also stated that while its restaurants will remain open and operating as usual during the Chapter 11 process, some underperforming restaurants will be closed and sold to a group of its lenders, which includes Fortress Investment Group.

Concurrent with the Chapter 11 process, court documents reveal that Red Lobster is investigating the role its majority owner, Thai Union, played in the restaurant chain’s ‘endless shrimp’ promotion that caused $11m in losses.

Red Lobster has said that the failed promotion was part of a pattern of mismanagement by the global seafood company that owns most of its equity and supplies shrimp to its restaurants.

Founded in 1968 and headquartered in Orlando, Florida, Red Lobster’s is focused on serving the highest quality, freshly prepared seafood that is traceable, sustainable and responsibly sourced. The company has around 550 casual dining restaurants in the US.

Mr Tibus added: “The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”

News: Red Lobster probes “endless shrimp” losses after bankruptcy filing